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Market Outlook December 22, 2014

Merry Christmas! It’s a few days early, but I won’t be writing again until after the holidays. Let’s just take a moment to remember that Christmas means more than what we own, and certainly more than what we get. It’s a feeling of kindness and compassion and, in my case, the smiles on children’s faces. So enjoy it, however you choose to celebrate.

The stock market, certain segments more than others, had a good week last week. Canadian large caps (XIU) rose by 5.16%, making up for a portion of the recent losses. (There’s still 3.39% to go for that.) Bonds still hold the advantage when comparing momentum and I’m not convinced it’s time to pile back into stocks.

In fact, comparing various asset classes, gold (IGT) appears to have the best momentum, although I don’t expect that to last long. I was surprised to see that the US market seems to have bounced back, especially small caps (IWM), followed by large caps (SPY). That bodes well for the new year.

There aren’t many stocks in the TSX 60 that look attractive at the moment, but one could look at Talisman Energy (TLM), Metro Grocery (MRU) or Valeant (VRX). In the US, Lowes (LOW), CVS (CVS) and Amgen (AMGN) could offer opportunity. (Full disclosure, I don’t own these and am not buying stocks at the moment.) As always, do your homework.

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